IBM Will Give $31 Million in Post-Riot Aid : Donation: Package to assist Rebuild L.A. includes vow to buy from minority-owned firms.
Computer giant IBM, joining an expanding group of corporations assisting the Rebuild L.A. task force, plans to announce today a five-year, $31-million aid package to help revitalize riot-ravaged inner-city areas of Los Angeles.
For the most part, International Business Machines Corp. will donate computer equipment and services to local job training programs, learning centers, community agencies and the Rebuild L.A. task force itself, sources familiar with the program said Tuesday.
IBM will also commit to spending $19.2 million to buy supplies and services from minority and inner-city businesses, and will teach minority business owners how to do business with IBM and other corporations.
The $31-million figure also includes about $5.5 million in equipment donations IBM has already made over the last year.
Ironically, word of IBM’s program came out at the same time the company’s Armonk, N.Y., headquarters said it expects to reduce its worldwide work force by 40,000 employees this year through voluntary job buyouts or early retirements.
The company, which is under stiff competitive pressure to cut costs, said it would reduce earnings by about $5.4 billion before taxes to pay for the actions.
Fred MacFarlane, a spokesman for Rebuild L.A., declined to discuss the IBM announcement, except to say it will “reverberate well through the Latino, African-American and Asian communities of Los Angeles and Greater L.A.â€
Frank Kern, general manager of IBM Los Angeles and a Rebuild L.A. board member, said in a statement: “We regard what we’re doing as an investment that will have many returns. . . . We believe in Los Angeles. We live and work here, and doing what we can to improve the quality of life and economy of our area means as much to us as anyone.â€
IBM Los Angeles, with headquarters downtown, employs more than 1,000 people in Southern California and would rank among the Fortune 500 if it were a separate company, officials said.
“I think this is wonderful,†said Sister Jennie Lechtenberg, whose Boyle Heights learning center will be the site of IBM’s announcement today.
“I wish more corporations would follow. If everyone would pitch in like IBM is, it will make a difference.†Lechtenberg is executive director and founder of the Puente Learning Center, which has received IBM equipment donations in the past.
With its announcement, IBM joins a group of businesses--including Vons, General Motors Corp. and Southern California Edison Co.--that have recently announced multimillion-dollar rebuilding programs.
IBM wins praise for being among the most socially active U.S. corporations.
“They’re known not just for largess to inner-city groups, but (for) a long-term (commitment) to adequate work force training,†said industry analyst Martin Ressinger with Duff & Phelps Inc. in Chicago.
After riots in the 1960s, for example, the company built a computer plant in the impoverished Bedford-Stuyvesant section of Brooklyn. Although employment there has fallen off, the plant still operates.
Other details of IBM’s Los Angeles rebuilding program:
- The company will donate $5 million worth of computers, software, services and expertise to open 10 new centers to train people for jobs in the computer and other industries.
- It will donate $1 million in computers and services to learning centers for disadvantaged youth and job training centers for disabled people.
- It will donate $300,000 worth of computers, software, furniture and other items to the Rebuild L.A. task force and other community groups.
